SUPERIOR COURT OF NEW JERSEY 

 APPELLATE DIVISION 

 DOCKET NO. A-3654-21 

NEW JERSEY REAL 

ESTATE COMMISSION, 

 Petitioner-Respondent, 

v.

RICHARD A. KARPF, 

 Respondent-Appellant, 

and 

JOSEPH THOMAS, 

 Respondent. 

 

Argued February 5, 2024 - Decided April 1, 2024 

Before Judges Sabatino, Mawla, and Marczyk. 

On appeal from the New Jersey Real Estate 

Commission, Department of Banking and Insurance, 

Docket No. CAM-16-018. 

Mario A. Iavicoli argued the cause for appellant. 

NOT FOR PUBLICATION WITHOUT THE 

APPROVAL OF THE APPELLATE DIVISION 

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
2 A-3654-21

Nicholas Klingbeil Kant, Deputy Attorney General, 

argued the cause for respondent (Matthew J. Platkin, 

Attorney General, attorney; Sookie Bae-Park, Assistant 

Attorney General, of counsel; William B. Puskas, Jr., 

Deputy Attorney General, on the brief). 

PER CURIAM 

 Respondent Richard A. Karpf1 appeals from the New Jersey Real Estate 

Commission's ("Commission") June 14, 2022 final determination and order 

suspending his broker's license for three years and imposing a $5,000 fine. 

Based on our review of the record and applicable legal principles, we affirm in 

part, vacate in part, and remand for further proceedings consistent with this 

opinion.

I.

 Karpf has been a licensed real estate broker since 1979 and owns a real 

estate business in Cherry Hill. In 2014, the Commission received an anonymous 

letter alleging Karpf failed to keep his real estate office open to the public during 

normal business hours and that he worked full-time as a teacher in violation of 

the Commission's regulations. This prompted an investigation. 

1

 We refer to Richard as "Karpf" and other witnesses who share his last name 

by their first name. We intend no disrespect. 
3 A-3654-21

 In October 2016, following the investigation, the Commission filed an 

order to show cause ("OTSC"). The Commission sought to revoke or suspend 

Karpf's real estate license and impose civil penalties and costs for Karpf's 

alleged violations under: (1) N.J.A.C. 11:5-4.4(a) for failing to maintain and 

supervise his licensed real estate office on a full-time basis and failing to have 

his real estate office open to the public during usual business hours, and (2) 

N.J.S.A. 45:15-17(e) alleging his conduct demonstrated unworthiness, 

incompetency, bad faith, or dishonesty.2 In January 2020, the matter was 

transferred to the Office of Administrative Law ("OAL") for a hearing before an 

Administrative Law Judge ("ALJ"). The ALJ conducted a two-day hearing in 

September 2021, and heard testimony from several witnesses. 

Dana Tatarek, an investigator for the Commission, conducted an 

investigation between June and the fall of 2014. She testified she conducted 

surveillance of Karpf's business by periodically going to his office at different 

2

 The OTSC also alleged certain statutory and regulatory violations stemming 

from an alleged failure by Karpf and one of his real estate agents, Joseph 

Thomas, to timely deposit certain checks. On February 1, 2018, Thomas entered 

into a consent order resolving all of the violations pending against him. On 

September 26, 2017, a hearing commenced before the Commission at which 

time Count I and Count II were dismissed as to Karpf. Accordingly, Count III 

of the OTSC alleging Karpf's conduct violated N.J.A.C. 11:5-4.4(a) and 

N.J.S.A. 45:15-17(e) remained as the sole count to be adjudicated. 
4 A-3654-21

times of the day, usually between the hours of 8:00 a.m. and 4:00 p.m. Tatarek 

visited the property approximately ten to twelve times and each time it was not 

open to the public. She did, however, on one occasion see Karpf cutting up 

signs on the property, but she did not speak with him because she was just 

"observing." Tatarek noticed a video doorbell camera had been installed at 

Karpf's office towards the end of her investigation, sometime in the fall of 2014. 

During that visit, Tatarek rang the doorbell and spoke to Karpf through the video 

doorbell, but he did not let her in and informed her an appointment was required. 

She did not know where Karpf was physically located when she spoke with him 

that day. In addition to surveilling Karpf's property, Tatarek also contacted the 

Philadelphia School District and obtained records documenting that Karpf was 

employed "full-time" as a teacher. 

Tatarek eventually met with Karpf, and he provided her a statement 

regarding his operation of the office. He noted his office was open seven days 

a week, and he "installed call forwarding and email" to conduct business with 

agents and customers. He also set up a "surveillance system to view customers 

and unwanted solicitations." He stated he considered his teaching in the 

Philadelphia School District to be a "part[-]time job[,] 180 days per year." 
5 A-3654-21

On cross-examination, Tatarek was asked if she ever made an appointment 

to see Karpf. She explained that as an investigator, she did not need an 

appointment because such action was permissible under the Commission rules. 

Tatarek testified she did not call the number provided on the sign on the office 

door to make an appointment prior to her visits.3 

Lauren Glantzberg, a supervisor of investigations for the Commission, 

testified Karpf was the only broker of record for his real estate office. She was 

familiar with Tatarek's investigation of Karpf, and she provided Tatarek 

direction during her investigation. Glantzberg testified one of her directives to 

Tatarek was to stop at Karpf's office at various times in the day to get an accurate 

representation of the activity within the office.4

3

 Karpf asserts that Tatarek's testimony was false because she testified she kept 

notes of her visits to Karpf's office, but the notes were never located by the 

Commission. Moreover, the Commission did locate "[New Jersey Department 

of Banking and Insurance ("DOBI")] - Trip Record Sheets" which only indicated 

Tatarek traveled to Cherry Hill four times during the period she was conducting 

the investigation. 

4

 Glantzberg testified investigators typically incorporate their investigative 

findings into their report, which is then sent to her. If notes were prepared by 

Tatarek as it related to her investigation, Glantzberg had no idea what happened 

to them, because she had never seen them. 
6 A-3654-21

On cross-examination, Glantzberg was questioned if real estate offices 

were impacted because of the pandemic—more specifically, if offices had to 

close their doors to the public. In response, she stated the Commission rules did 

not change during the pandemic, but the Governor issued Executive Orders 

which mandated the closure of certain businesses. Glantzberg agreed the real 

estate industry was able to function during the pandemic. Without having access 

to her files, she could not say with any certainty whether any complaints had 

been filed with her office during the COVID-19 pandemic because a real estate 

office was not open to the public.5

 Glantzberg was aware of investigative practices where field investigators 

show up at a broker's office unannounced. She agreed that a property owner has 

the right to determine who may enter their property but, under the rules and 

regulations, a real estate office is required to be open to the public during 

business hours. She did not know whether Karpf could be reached by phone 

during the business day. She was aware that Tatarek did, at one point, call the 

number on the door and speak to Karpf. However, she did not believe there was 

anyone in the office. She testified the regulations require the broker of record 

5

 The time period of the investigation at issue was in 2016, prior to the 2020 

COVID-19 pandemic. 
7 A-3654-21

to maintain a full-time main office. She acknowledged that today's real estate 

market has changed, in that most property listings are online. 

Karpf testified the difference between a broker's license and a 

salesperson's license is that a salesperson is required to work under a broker, 

and a broker can work independently. He asserted he was available every day 

of the week around the clock, "[t]wenty-four hours, basically." He stated he was 

a teacher in the Philadelphia school system and worked five days a week the 

entire school year starting in September and ending in June.6 He taught five 

classes a day with each class lasting from forty-five minutes to an hour or more, 

and he was at school from 8:00 a.m. to 3:00 p.m. He considered his job as a 

school teacher part-time, and his job as a real estate broker full-time. When 

classes ended, he would go straight to his office and work until 10:00 p.m. He 

would also work in the office on weekends. 

Karpf stated that the real estate industry has evolved over the years from 

when he first started because potential clients used to come into the office and 

6

 Karpf testified he worked in the Philadelphia school system as a teacher "[i]n 

and out over a period of many years," "probably for over [thirty] years, 

possibly." He testified he retired in or around 2016. The records from the 

Philadelphia school system indicated he worked there since at least 2001. 
8 A-3654-21

go through the books. However, he testified everything is now done through the 

internet. 

Deborah Ann Harris-Karpf, Karpf's wife, testified that for the past twenty 

years, until 2019, she worked full-time for a television station in Philadelphia. 

Her work hours at the time were 4:00 a.m. to 1:00 p.m. She testified she has 

been a licensed salesperson with Karpf's office since 2005. Deborah would 

leave work at the television station at 1:00 p.m. and get to the real estate office 

by 1:30 p.m.7 If someone called looking for Karpf, she would take a message 

and relay it to him. She has never had to contact Karpf on an emergent basis. 

Deborah testified her husband would arrive at the office around 3:30 p.m., and 

they would both work weekends. She noted the real estate agents that worked 

for the company "[v]ery rarely" came to the office. She stated that Karpf was 

always able to supervise her and any of the other agents connected to the office. 

Arthur Karpf, Karpf's father, testified he had worked at Karpf's office for 

several years, mostly on weekdays from 9:00 a.m. to 5:00 p.m. He was always 

7

 On cross-examination, Deborah confirmed that she would typically arrive at 

the real estate office around 1:30 p.m. When shown her deposition testimony in 

a separate matter, specifically wherein she stated she would arrive at the real 

estate office around 3:00 or 4:00 p.m., Deborah stated that her arrival at the real 

estate office varied depending on the day. 
9 A-3654-21

able to reach Karpf to convey messages. While Arthur holds a real estate 

license, he did not actively use it. 

Three of Karpf's part-time agents—William Toner, William Hamish, and 

Michael DeLaura—each testified Karpf was always accessible and responsive 

even when out of the office. DeLaura also testified the industry has changed 

over the years, and currently there is not as much of a need for office time 

because most of his work is handled by using Google. 

Jared Karpf, Karpf's son, echoed the testimony of the other agents, stating 

he never had difficulty reaching his father, nor did any of his clients. He also 

testified the internet has completely changed the relationship between brokers 

and clients. 

Based upon the testimonial and documentary evidence presented in the 

matter, the ALJ concluded Karpf's conduct, which had spanned for many years, 

was in violation of N.J.A.C. 11:5-4.4(a), and demonstrated unworthiness, 

incompetence, and bad faith in violation of N.J.S.A. 45:15-17(e). The ALJ 

concluded Karpf's office was not, based on the language of N.J.A.C. 11:5-4.4, 

"open to the public during usual business hours." She further found that 

"business hours" are defined as "[t]hose hours of the day during which, in a 

given community, commercial, banking, professional, public, or other kinds of 
10 A-3654-21

business are ordinarily carried on," which "is . . . not the time during which a 

principal requires an employee's services, but the business hours of the 

community generally." Bus. Hours Definition & Legal Meaning, L. Dictionary, 

https://thelawdictionary.org/business-hours/ (last visited Mar. 15, 2024). 

The ALJ found that the office door was locked, and when the investigator 

went to visit on multiple occasions, no one answered. Specifically, the ALJ 

observed, 

[a]t no time during any of [Tatarek's] unannounced 

visits did anyone answer the door and/or let her in the 

office despite the fact that [Arthur] testified that he was 

there all day during most weekdays, and [Deborah] 

stated that she was in the office at some point every 

afternoon during the week and worked on the 

weekends. 

The ALJ found Tatarek's testimony "to be very credible," as a result of 

her "surveillance over several months and obtaining documentation." Regarding 

the trip history documents from September and October 2016, the ALJ noted 

they included some of the days and times when school was in session and Karpf 

"would have been at his full-time position of teaching." 

However, the ALJ "found [Karpf's] testimony that he operated his real 

estate business on a full-time basis during usual business hours to be equally 

self-serving and disingenuous given the testimonial and documentary evidence 
11 A-3654-21

presented in this matter." The ALJ also stated that Karpf's full-time teaching 

job "violate[d] N.J.A.C. 11:5-4.4 in that absent work-related absences, he was 

required to be physically present in the office during usual business hours. 

Clearly, teaching is not related to [Karpf's] real estate business." The ALJ found 

Karpf's assertion that he always maintained an office, open to the public, during 

usual business hours was contrary to the credible evidence presented in this 

matter. The ALJ determined his full-time employment as a teacher undermined 

his assertion that he was a full-time broker, and that Karpf could "not be in two 

places at once nor could his sales staff or clients reach him when he was 

teaching." 

With respect to N.J.S.A. 45:15-17(e), the ALJ concluded that Karpf's 

conduct, which took place over many years when he worked as a full-time 

teacher, was in violation of N.J.A.C. 11:5-4.4(a), which evidenced 

unworthiness, incompetence, and bad faith in violation of N.J.S.A. 45:15-17(e). 

Karpf's "continued intentional misrepresentation of his obligations under the Act 

to justify his actions" were a part of the equation in finding a violation of the 

statute. 
12 A-3654-21

The ALJ also evaluated the Kimmelman8 factors for determining the 

appropriate monetary penalty. After balancing the factors, the ALJ imposed a 

$2,500 fine. Additionally, she concluded Karpf's conduct warranted a two-year 

suspension. 

The Commission ultimately adopted the ALJ's findings related to the 

violations of N.J.A.C. 11:5-4.4(a) and N.J.S.A. 45:15-17(e). The Commission 

noted N.J.A.C. 11:5-4.4(a) was substantially updated in 1988,9to "eliminate any 

misunderstanding by employing brokers and brokers of record as to their 

responsibility concerning office management during normal business hours." 

Additionally, as discussed below, the Commission addressed a similar situation 

in 1989 where a commenter was concerned the amended regulations would 

preclude a broker, who also taught real estate prelicensure courses, from 

teaching courses during normal business hours.10

The Commission modified the ALJ's recommendations and increased the 

monetary penalty from $2,500 to $5,000. It also increased the license 

suspension to three years. 

8

 Kimmelman v. Henkels & McCoy, Inc., 108 N.J. 123, 137-39 (1987). 

9

 20 N.J.R. 1160(a) (June 6, 1988). 

10

 21 N.J.R. 2523(a) (Aug. 21, 1989). 
13 A-3654-21

II. 

On appeal, Karpf contends the case should be dismissed as res judicata 

because he claims the Commission previously dismissed the OTSC. Karpf next 

argues he maintained a designated main office open to the public in full 

compliance with N.J.S.A. 45:15-12. He further asserts the Commission erred in 

relying on Tatarek's testimony because she misrepresented how many times she 

visited Karpf's property during her investigation. He contends his office was 

open during usual business hours, it was always supervised, he was always 

accessible for clients and sales agents, and he worked full-time as a broker. 

Karpf maintains the regulations, which require a broker to maintain a 

physical office are antiquated, serve no legitimate government purpose, and that 

N.J.A.C. 11:56-4.4 is vague and confusing. He further contends he was denied 

due process regarding the Commission's reliance on N.J.A.C. 11:5-3.8, but 

regardless the regulation supports his position because he worked full-time as a 

broker. Karpf argues he should not have been penalized because he did not act 

in bad faith, he obtained no profit from illegal activity, and there was no injury 

to the public. 

"The scope of review in a case involving [an] appeal from the 

[Commission] is the same as that for other administrative agencies . . . ." 
14 A-3654-21

Morgan v. Saslaff, 123 N.J. Super. 35, 38 (App. Div. 1973). We have "'a limited 

role' in the review of [agency] decisions." In re Stallworth, 208 N.J. 182, 194 

(2011) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)). "[A] 

'strong presumption of reasonableness attaches to [an agency decision].'" In re 

Carroll, 339 N.J. Super. 429, 437 (App. Div. 2001) (quoting In re Vey, 272 N.J. 

Super. 199, 205 (App. Div. 1993)). "In order to reverse an agency's judgment, 

an appellate court must find the agency's decision to be 'arbitrary, capricious, or 

unreasonable, or . . . not supported by substantial credible evidence in the record 

as a whole.'" Stallworth, 208 N.J. at 194 (quoting Henry, 81 N.J. at 579-80). 

Our Supreme Court has held: 

In determining whether agency action is 

arbitrary, capricious, or unreasonable, a reviewing

court must examine: 

(1) whether the agency's action violates 

express or implied legislative policies, that 

is, did the agency follow the law; (2) 

whether the record contains substantial 

evidence to support the findings on which 

the agency based its action; and (3) 

whether in applying the legislative policies 

to the facts, the agency clearly erred in 

reaching a conclusion that could not 

reasonably have been made on a showing 

of the relevant factors. 

[Ibid. (quoting In re Carter, 191 N.J. 474, 482-83 

(2007)).] 
15 A-3654-21

An appellate court "may not substitute its own judgment for the agency's, 

even though [it] might have reached a different result." Ibid. (quoting Carter, 

191 N.J. at 483). "This is particularly true when the issue under review is 

directed to the agency's special 'expertise and superior knowledge of a particular 

field.'" Id. at 195 (quoting In re Herrmann, 192 N.J. 19, 28 (2007)). 

Furthermore, "[i]t is settled that '[a]n administrative agency's interpretation of 

statutes and regulations within its implementing and enforcing responsibility is 

ordinarily entitled to our deference.'" E.S v. Div. of Med. Assistance & Health 

Servs., 412 N.J. Super. 340, 355 (App. Div. 2010) (second alteration in original) 

(quoting Wnuck v. N.J. Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. 

Div. 2001)). "Nevertheless, '[appellate courts] are not bound by the agency's 

legal opinions.'" A.B. v. Div. of Med. Assistance & Health Servs., 407 N.J. 

Super. 330, 340 (App. Div. 2009) (quoting Levine v. State Dep't of Transp., 338 

N.J. Super. 28, 32 (App. Div. 2001)). "Statutory and regulatory construction is 

a purely legal issue subject to de novo review." Ibid. 

A. 

Karpf argues the cause of action against him should be barred as res 

judicata. He asserts the OTSC was dismissed because the Commission "did not 

want the hearing to proceed" and directed the parties to engage in settlement 
16 A-3654-21

discussions after it dismissed certain counts of the OTSC. Karpf contends the 

Commission later "dismissed the cause of action" because "no settlement 

occurred," and it "had chosen to dismiss [the matter] . . . since the proceeding 

was not worthy of the [Commission's] time or effort." 

Res judicata serves important goals, including "finality and repose; 

prevention of needless litigation; avoidance of duplication; reduction of 

unnecessary burdens of time and expenses; elimination of conflicts, confusion 

and uncertainty; and basic fairness[.] " First Union Nat'l Bank v. Penn Salem 

Marina, Inc., 190 N.J. 342, 352 (2007) (alteration in original) (quoting 

Hackensack v. Winner, 82 N.J. 1, 32-33 (1980)). "Adjudicative determinations 

by administrative tribunals are entitled to preclusive effect if rendered in 

proceedings meriting that deference." Olivieri v. Y.M.F. Carpet, Inc., 186 N.J. 

511, 522 (2006) (quoting Zoneraich v. Overlook Hosp., 212 N.J. Super. 83, 93-

94 (App. Div. 1986)).

Res judicata or claim preclusion applies when a party seeking to apply the 

doctrine establishes: (1) a valid judgment on the merits was entered on the claim 

in a prior action; (2) the parties in the later action are identical or in privity with 

those in the prior action; and (3) the claim in the later actions arose out of the 

same transaction or occurrence as the claim in the earlier case. Watkins v. 
17 A-3654-21

Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 412 (1991). "Claim preclusion 

applies not only to matters actually determined in an earlier action, but to all 

relevant matters that could have been so determined." Ibid. 

We are unpersuaded by Karpf's argument. On September 26, 2017, the 

Commission "adjourn[ed] the hearing as to Count [III] . . . to permit counsel the 

opportunity to discuss settlement." On June 25, 2019, a proposed consent order 

in settlement of that remaining count was presented and rejected by the 

Commission. On January 14, 2020, it transferred the matter to the OAL as to 

remaining claims against Karpf. The transfer order noted that the "only 

remaining issue to be adjudicated" was "the sole remaining Count of the OTSC, 

Count [III], [which] alleged that Karpf had failed to maintain and supervise his 

real estate office full-time." 

It is clear there was no final adjudication on the merits of Count III 

because it was not dismissed. Rather, the matter was merely adjourned for 

settlement discussions. The Commission subsequently referred the matter for a 

hearing before an ALJ. It was only after the Commission adopted, in part, the 

ALJ's decision that this matter was adjudicated. Accordingly, there is no basis 

to dismiss this matter as res judicata. 

B.
18 A-3654-21

Karpf next asserts he maintained his Cherry Hill office in compliance with 

N.J.S.A. 45:15-12. He argues he worked full-time as a broker, the office was 

open and supervised seven days a week, and the Commission's OTSC was only 

filed because Tatarek "misrepresented core . . . facts" regarding her 

investigation. He claims Tatarek's testimony was inaccurate that she visited the 

property ten to twelve times based on the DOBI Trip Records Sheets, which 

revealed only four trips to Cherry Hill, and her other notes were never produced. 

Moreover, the trip records do not specifically reference visits to Karpf's office. 

Tatarek also observed Karpf at the office cutting up signs on one of the visits, 

he answered the video doorbell on another occasion, and met with her on one 

occasion. 

Karpf also argues there was no testimony regarding what "usual business 

hours" means for the purpose of N.J.A.C. 11:5-4.4(a) and that his usual business 

hours were from 3:30 to 10:00 p.m. when he was not teaching. Moreover, he 

claims the office was open during the week between 9:00 a.m. and 5:00 p.m. 

when his father was working, and Deborah was in the office weekdays beginning 

at 1:00 p.m. The office was also open on weekends. He also claims he was 

permitted to have the door locked for security purposes, and the public could 
19 A-3654-21

"obtain his services by telephone, email, text or in person." Karpf further 

contends he was always accessible to his agents. 

Lastly, Karpf argues he worked as a real estate broker full-time at least 

fifty hours a week "every week of the year." He claims he did not work thirtyfive hours a week as a teacher. That is, although he was at school from 8:00 

a.m. to 3:00 p.m., he only "worked" twenty-five hours a week as a teacher. 

Moreover, "[b]efore, after and between classes" he made calls, corresponded by 

email and text, reviewed paperwork, and searched the internet. He further 

claims "it is unimportant as to whether [he] worked part-time or full-time as a 

teacher" but rather when he worked full-time as a real estate broker. 

The Commission is charged with administering the New Jersey Real 

Estate License Act, N.J.S.A. 45:15-1 to -42. These responsibilities include 

issuing real estate licenses to individuals and entities under N.J.S.A. 45:15-9, 

investigating the activities of licensees, and imposing sanctions for violations of 

the Act under N.J.S.A. 45:15-17. The Commission is also authorized to 

promulgate rules and regulations for the conduct of the real estate brokerage 

business. N.J.S.A. 45:15-17(t). 

N.J.A.C. 11:5-4.4(a) states: 

Every resident real estate broker not licensed as a

broker-salesperson shall maintain a main office for the 
20 A-3654-21

transaction of business in the State of New Jersey,

which shall be open to the public during usual business 

hours. This main office and the activities of the 

licensees working from it shall be under the direct

supervision of either the broker . . . or of a person 

licensed as a broker-salesperson. Such supervision

shall be maintained on a full[-]time basis. Maintaining 

full-time supervision shall not be construed as requiring 

the person performing the supervisory functions to be 

present at the office location continuously during usual 

business hours. However, the person performing the

supervisory functions shall provide sufficient 

information so as to allow the personnel at the main 

office to make communication with that person at all 

times. Further, the licensee supervising the main office 

shall be so employed on a full-time basis and, when not 

required to be away from the office for reasons related 

to the business of the office, shall be physically present 

at that office during usual business hours at least five 

days per calendar week (excluding vacations and 

emergencies) and shall not be otherwise employed 

during such time. 

[(Emphasis added).] 

During the rulemaking process in 1988, the Commission amended N.J.A.C. 

11:5-4.4 (then codified as N.J.A.C. 11:5-1.18) to "ensure that employing brokers 

and brokers of record are aware of their obligation to directly supervise their 

primary office location" and to "eliminate any misunderstanding as to their 

responsibility concerning office management during normal business hours." 20 

N.J.R. 1160 (a) (June 6, 1988). The 1988 Commission noted that 
21 A-3654-21

[consumers] will be assured that the broker's office is 

properly supervised at all times. The presence of a 

qualified licensee exerting supervisory authority over 

all activities at an office on a full-time basis should help 

to assure that quality service is provided to all members 

of the public including those who may be dealing 

directly with a relatively inexperienced licensee. 

. . . . 

Brokers shall reap the financial rewards from satisfied 

clients who have received real estate services overseen 

by a senior licensee. Also, upon implementation of the 

management procedures as required by the amendment,

many real estate enterprises should experience a 

financial savings because of the reduction of 

administrative errors and subsequent delays in 

transactions which frequently result from poorly 

managed offices. Furthermore, the amendment should

reduce the number of complaints from clients to brokers 

and to the [Commission]. Thus, the Commission will

save the time and expense of investigating such 

complaints and conducting hearings to resolve disputes 

which frequently arise from a lack of adequate 

supervision of some licensees. 

[Id. at 1161 (emphasis added).]

Then in 1989, the Commission received comments on the amended 

regulation and was expressly asked to address a similar situation as this case. A 

commenter "expressed opposition to the amendment because it appeared . . . it 

would limit a . . . broker of record who also teaches [real estate] prelicensure 
22 A-3654-21

courses from teaching [those courses] during normal business hours." 21 N.J.R. 

2523(a) (Aug. 21, 1989). The Commission responded:

Such a broker can continue to teach during those hours 

so long as the broker's main office is supervised by a 

licensed broker-salesperson during his or her absence. 

The Commission determined that if such an 

arrangement cannot be made, such a broker would have 

to choose whether they wanted to keep their brokerage 

as their primary occupation and, therefore, relegate 

their instructional activities to a part-time status, or 

make education their primary endeavor, in which case 

they would work as a broker-salesperson for another

broker on a part-time basis. 

[21 N.J.R. 2523(a) (Aug. 21, 1989) (emphasis added).] 

Here, regarding the definition of "usual business hours" and "full-time 

employment," the ALJ looked to N.J.A.C. 11:5-3.811 for guidance, but as the 

Commission stated, "[o]f note" the ALJ found "usual business hours" were 

defined as "[t]hose hours of the day during which, in a given community, 

11 N.J.A.C. 11:5-3.8 addresses the experience requirement for licensure as a 

broker. That regulation requires applicants seeking licensure as a broker to show 

that they have been "continuously licensed and employed on a full-time basis as 

a real estate salesperson during the three years immediately preceding their 

application" with "full-time employment" demonstrated by working "as a 

salesperson under the authority of the broker(s) with whom they were licensed 

for at least [forty] hours per week and during the hours of approximately 10:00 

[a.m.] to 8:00 [p.m.]" Ibid. 
23 A-3654-21

commercial, banking, professional, public, or other kinds of business are 

ordinarily carried on," which "is . . . not the time during which a principal 

requires an employee's services, but the business hours of the community 

generally." Bus. Hours Definition & Legal Meaning, L. Dictionary, 

https://thelawdictionary.org/business-hours/ (last visited Mar. 15, 2024). 

Here, the Commission noted Karpf was the broker of record for his office 

and there was no broker-salesperson working for him. Karpf was "continuously 

employed full[-]time by the Philadelphia School District as a . . . teacher" from 

2001 until 2014. He worked Monday through Friday from 8:00 a.m. to 3:00 

p.m., September through June. It further determined while he was teaching in 

Philadelphia, Karpf was not physically at his real estate office and could not be 

reached by his staff or clients. Moreover, Tatarek, who the ALJ found to be 

credible, conducted several unannounced visits at various times of the day, and 

Karpf's office was closed to the public at those times, despite the testimony that 

Arthur was there all day on most weekdays and that Deborah was present in the 

afternoons.

The Commission was unpersuaded by the argument that Karpf maintained 

a designated office open to the public during "his" usual business hours, and the 

hours Karpf spent in the office after he was finished teaching did not satisfy 
24 A-3654-21

N.J.A.C. 11:5-4.4. Moreover, it was unconvinced Karpf's office was open 

during usual business hours on weekdays when he was teaching.

The Commission further referenced the ALJ's decision rejecting Karpf's 

contention that he was a full-time broker who at all times supervised his real 

estate office and was accessible to clients and sales representatives. It noted 

Karpf's own testimony revealed he was a salaried employee at the Philadelphia 

School District, and as such, he could not have simultaneously complied with 

his obligation to be employed as a broker on a full-time basis at his real estate 

office. 

The Commission observed the ALJ's findings "were based both on the 

documentary evidence and the testimony presented at the hearing, including the 

testimony of Tatarek regarding her surveillance of [Karpf's] office and the 

uncontroverted evidence that [he] was employed full-time as a teacher by the 

School District of Philadelphia during normal business hours." The Commission 

viewed Karpf's teaching responsibilities analogous to the 1989 inquiry made by 

a broker who also had teaching responsibilities. It noted, 

To be in compliance with N.J.A.C. 11:5-4.4(a), [Karpf] 

faced the exact choice presented by the [broker in 

1989]: he could hire a licensed broker-salesperson to 

supervise his brokerage office during usual business 

hours and provide the supervisory safeguards 

contemplated by N.J.A.C. 11:5-4.4(a) or maintain the 
25 A-3654-21

brokerage office as his primary occupation and 

discontinue teaching. 

[See 21 N.J.R. 2523(a) (Aug. 21, 1989).]

The Commission found Karpf "did neither and instead elected to intentionally 

misrepresent and mischaracterize his teaching position—which required a 

minimum commitment of [thirty-five] hours per week from 8:00 a.m. to 3:00 

p.m. for the duration of the school year, from approximately September to 

June—as 'part[-]time' employment." 

The Commission found Karpf's attempt to minimize his work as a teacher 

was "self-serving, disingenuous, and contrary to common sense." It further 

determined he failed to ensure his agents were supervised on a full-time basis. 

The Commission agreed with the ALJ's conclusion that Karpf was "unavailable 

during 'usual business hours' as he could not be in two places at once nor could 

his sales staff or clients reach him when he was teaching." Contrary to Karpf's 

arguments regarding the credibility of Tatarek, the Commission found the ALJ's 

findings were fully supported by the evidence and "the uncontroverted fact 

remains that [Karpf] was employed full[-]time during normal business hours in 

the Philadelphia school district when he had the responsibility to ensure his 

broker's office . . . was open to the public and being properly supervised full[-

]time, in violation of N.J.A.C. 11:5-4.4(a)." The Commission further concluded 
26 A-3654-21

Karpf's violations of N.J.A.C. 11:5-4.4(a), "which continued unabated for years 

. . . based upon dubious reasoning" demonstrated "unworthiness, incompetence, 

and bad faith" under N.J.S.A. 45:15-17(e).

We determine the Commission's comprehensive findings were not 

arbitrary, capricious, or unreasonable, and there was ample evidence in the 

record to support its conclusions that Karpf violated N.J.A.C. 11:5-4.4(a) and 

N.J.S.A. 45:15-17(e). Specifically, there was substantial credible evidence 

relied upon by the Commission in finding Karpf was not employed as a broker 

on a full-time basis because he failed to: maintain and supervise his office on a 

full-time basis; have the office open during usual business hours; and be 

physically present during usual business hours five days a week pursuant to 

N.J.A.C. 11:5-4.4(a). The Commission's reliance on Tatarek's testimony, 

coupled with Karpf's admissions, outlined above, provided sufficient evidence 

to support its findings. There was more than enough evidence to support the 

allegations in the OTSC given Karpf's full-time employment as a teacher during 

the time he was purportedly supervising the office. Moreover, there was 

adequate evidence the office was not open to the public in violation of N.J.A.C. 

11:5-4.4(a). 
27 A-3654-21

Although Karpf raises issues challenging the credibility of Tatarek, we 

find no basis to disturb the Commission's conclusions, which adopted the ALJ's 

credibility findings. Again, we "may not substitute [our] own judgment for the 

agency's, even though [we] might have reached a different result." Stallworth, 

208 N.J. at 194 (quoting Carter, 191 N.J. at 483). "This is particularly true when 

the issue under review is directed to the agency's special 'expertise and superior 

knowledge of a particular field.'" Id. at 196 (quoting Herrmann, 192 N.J. at 28). 

Accordingly, we discern no basis to disturb the Commission's findings as to the 

violations of N.J.A.C. 11:5-4.4(a) and N.J.S.A. 45:15-17(e).

C.

Karpf next argues that N.J.A.C. 11:5-4.4 is "antiquated, 

outmoded, . . . provides no legitimate governmental purpose[,] . . . no benefit to 

the people of New Jersey[, and] therefore . . . cannot be enforced." In support 

of this argument, Karpf relies on the testimony of two of his real estate agents 

who testified the real estate industry has significantly changed since the creation 

of the internet, which requires less of a need to physically be in an office. The 

testimony highlighted how residential real estate customers do much of their 

searching for properties online and often utilize virtual tours. Specifically, one 

of the agents stated there will probably be a lesser need for agents in the future. 
28 A-3654-21

Karpf also asserts the regulations are "about protectionism . . . to deter out of 

state real estate companies from doing business in New Jersey solely through 

the internet, since [they] charge" two-percent commissions instead of sixpercent, like in-state companies, which ultimately hurts the consumer. Karpf 

also argues the language in N.J.A.C. 11:5-4.4(a) is void for vagueness. 

When an executive agency exercises its rulemaking function, it is afforded 

substantial deference. Commc'ns Workers of Am., AFL-CIO v. N.J. Civ. Serv. 

Comm'n, 234 N.J. 483, 513-14 (2018). Thus, we must "defer to an agency's 

interpretation of both a statute and implementing regulation, within the sphere 

of the agency's authority, unless the interpretation is 'plainly unreasonable.'" In 

re Election L. Enf't Comm'n Advisory Op. No. 01-2008, 201 N.J. 254, 262 

(2010) (quoting Reilly v. AAA Mid-Atl. Ins. Co. of N.J., 194 N.J. 474, 485 

(2008)). Moreover, we cannot substitute our judgment for that of the agency. 

In re Polk, 90 N.J. 550, 578 (1982). 

Given the substantial deference we afford to the Commission in 

rulemaking, we are unpersuaded by Karpf's contentions. The regulations are not 

plainly unreasonable. The Commission's interpretation and the implementation 

of N.J.A.C. 11:5-4.4(a) is well within the reasonable bounds of agency 

interpretation. 
29 A-3654-21

Both the ALJ and the Commission found this argument unavailing relying 

on Pipes's12 mandate that "a heavy burden is imposed upon those who challenge 

the validity of a regulation . . . . The [p]etitioner must prove that the regulation 

is arbitrary, unreasonable or non-compliant with the legislative mandate." The 

Commission is charged with protection of the public, and their implementation 

of this regulation is in accordance with such mandate. In Pipes, in addressing a 

challenge to a different portion of the regulations, N.J.A.C. 11:5-3.8(a), we 

observed: 

The obvious purpose of the Commission's 

regulation . . . is to ensure that real estate brokers 

possess experience not only in the sale and lease of real 

estate but also in the day-to-day operation of the 

brokerage business such as the management of 

fiduciary accounts, drafting of contracts, interaction 

with financial institutions and other professionals

including supervision of real estate salespersons. In an 

industry in which many salespersons work part-time or 

primarily on weekends, the subject regulation is a 

recognition that a full-time commitment to the real

estate brokerage business insures greater protection to 

the public. 

[329 N.J. Super. at 397 (citations omitted).] 

This same rationale applies to N.J.A.C. 11:5-4.4(a). Moreover, if Karpf needed 

clarification regarding the operation of his office under N.J.A.C. 11:5-4.4(a), he 

12

 In re Pipes, 329 N.J. Super. 391, 397 (App. Div. 2000). 
30 A-3654-21

could have submitted an inquiry to the Commission for clarification. Further, 

he could have submitted a petition for rulemaking pursuant to N.J.S.A. 52:14B4(f), if he believed the regulations needed to be changed. Accordingly, we reject 

Karpf's arguments on this issue. 

Nevertheless, we briefly note, given the significant changes in technology 

since the amendments to N.J.A.C. 11:5-4.4(a) in 1988, it may be appropriate for 

the Commission to revisit the regulations. We recognize N.J.A.C. 11:5-4.4(a) 

was promulgated based on N.J.S.A. 45:15-12, which requires "[e]very real estate 

broker shall maintain a designated main office open to the public." However, 

the widespread utilization of the internet, the ubiquitous use of smartphones, 

emails, text messaging, video conferencing, remote work, and the electronic 

signing of documents has had a substantial impact on the way society conducts 

business. The Commission should consider whether N.J.A.C. 11:5-4.4(a) 

should be amended to account for these changes. Of course, this function is

entrusted to the Commission, not the courts.13 

13

 In other highly regulated areas such as the practice of law, we have seen 

changes such as the amendments to the bona fide office rule. See R. 1:21-1(a)(1) 

(eliminating the requirement for an attorney to "maintain a fixed physical 

location" to practice law). Still, to ensure "prompt and reliable communication" 

between an attorney and client, Rule 1:21-1(a)(1) requires that "an attorney must 

designate one or more fixed physical locations where client files and the 
31 A-3654-21

Karpf also argues that certain terms in N.J.A.C. 11:5-4.4(a), such as "usual 

business hours," "full-time basis," and "open to the public," are void for 

vagueness. We are unpersuaded. 

"The vagueness doctrine 'is essentially a procedural due process concept 

grounded in notions of fair play.'" State v. Lenihan, 427 N.J. Super. 499, 512 

(App. Div. 2012) (quoting State v. Lee, 96 N.J. 156, 165 (1984)). "The 

vagueness doctrine is premised on the notion that the law must 'give the person 

of ordinary intelligence a reasonable opportunity to know what is prohibited, so 

that he may act accordingly.'" State v. Stafford, 365 N.J. Super. 6, 15 (App. 

Div. 2003) (quoting Grayned v. City of Rockford, 408 U.S. 104, 108 (1972)). 

"In determining vagueness, a common sense approach is appropriate in 

construing the enactment in terms of the persons who may be subject to it, and 

in context with its intended purpose." Ibid. (quoting Chez Sez VIII, Inc. v. 

Poritz, 297 N.J. Super. 331, 351 (App. Div. 1997)). A statute need not be a 

"model of precise draftsmanship" to "sufficiently describe[] the conduct that it 

proscribes." State v. Afanador, 134 N.J. 162, 169 (1993). 

attorney's business and financial records may be inspected on short notice by 

duly authorized regulatory authorities, where mail or hand-deliveries may be 

made and promptly received, and where process may be served on the attorney 

for all actions, including disciplinary actions . . . ." 
32 A-3654-21

N.J.A.C. 11:5-4.4(a) is not void for vagueness. Notwithstanding Karpf's 

contention, the Commission adopted a reasonable and sensible reading of the 

regulation and the terms "usual business hours," "full-time basis," and "open to 

the public." We discern nothing in the regulation as unconstitutionally vague 

based on the commonplace meaning of the terms used in the regulation. 

D.

Karpf next asserts that this matter should be dismissed as his due process 

rights were violated because the Commission relied on N.J.A.C. 11:5-3.8, which 

was not charged in the OTSC. Alternatively, he contends N.J.A.C. 11:5-3.8 

supports his position because he worked more than forty hours a week between 

the hours of 10:00 a.m. and 8:00 p.m. 

The Commission correctly noted Karpf was not found to have violated 

N.J.A.C. 11:5-3.8. Instead, N.J.A.C. 11:5-3.8 was referenced by the ALJ as 

guidance to interpret N.J.A.C. 11:5-4.4(a). Moreover, N.J.A.C. 11:5-3.8 is a 

regulation that addresses salespersons seeking to become a broker and does not 

alter the requirements for a broker under N.J.A.C. 11:5-4.4(a). Ultimately, as 

noted by the Commission, even though the ALJ referenced N.J.A.C. 11:5-3.8, 

she noted the definition of "usual business hours" were "those hours of the day 

during which, in a given community, commercial, banking, professional, public, 
33 A-3654-21

or other kinds of business are ordinarily carried on." The Commission further 

determined "the uncontroverted fact remains that [Karpf] was employed 

full[-]time during normal business hours [as a teacher] when he had the 

responsibility to ensure his broker's office . . . was open to [the] public and being 

properly supervised" pursuant to N.J.A.C. 11:5-4.4(a). Accordingly, we are 

unconvinced by Karpf's contentions regarding N.J.A.C. 11:5-3.8. 

E.

Karpf argues there should not be a penalty in this matter because: he did 

not act in bad faith; did not profit from illegal activity; there was no injury to 

the public; he reasonably believed there was no violation of a regulation; there 

was no criminal conduct; and he had no past violations. 

Under the Act, the Commission may take action against a licensee for the 

violation of any of the provisions of the Act or the regulations promulgated 

thereunder. N.J.S.A. 45:15-17(t). If a violation is found, it may place on 

probation, suspend, or revoke the license of a real estate salesperson for "[a]ny 

conduct which demonstrates unworthiness, incompetency, bad faith or 

dishonesty." N.J.S.A. 45:15-17(e). The Commission may also impose "a 

penalty of not more than $5,000 for the first violation, and a penalty of not more 
34 A-3654-21

than $10,000 for any subsequent violation," in place of, or in addition to, any 

license suspension or revocation. N.J.S.A. 45:15-17.

An agency has "broad discretion in determining the sanctions to be 

imposed for a violation of the legislation it is charged with administering." In 

re Scioscia, 216 N.J. Super. 644, 660 (App. Div. 1987). Correspondingly, 

appellate courts have limited "review of an agency's choice of sanction . . . ." In 

re License Issued to Zahl, 186 N.J. 341, 353 (2006). The appropriate test for 

reversal is "whether such punishment is so disproportionate to the offense, in 

light of all the circumstances, as to be shocking to one's sense of fairness." Id. 

at 354 (internal quotation marks omitted) (quoting Polk, 90 N.J. at 578). 

Our Supreme Court delineated a list of factors to consider in determining 

whether an agency's monetary sanction is arbitrary, capricious, or unreasonable: 

(1) the licensee's good or bad faith; (2) the licensee's ability to pay a financial 

penalty; (3) the amount of profit earned from wrongful activity; (4) the extent 

of any injury to the public; (5) the duration of the wrongful activity; (6) the 

existence of any criminal actions; and (7) the existence of any prior violations. 

Kimmelman, 108 N.J. 137-40. 

As to the first Kimmelman factor, the Commission determined Karpf 

demonstrated bad faith because he was aware of his responsibilities under the 
35 A-3654-21

Act, "including the requirement to have his office open to the public during usual 

business hours." Because it determined Karpf's arguments were disingenuous 

and self-serving, this factor favored a higher monetary penalty. 

The Commission found there was no evidence presented as to the second 

Kimmelman factor—Karpf's ability to pay. It determined it was Karpf's burden 

to prove his inability to pay a fine, and he failed to do so. Because it was not 

met, the Commission viewed the factor as neutral.

As to the third Kimmelman factor, which addresses the profits obtained or 

likely to be obtained from the illegal activity, the Commission observed the 

profits obtained by Karpf were unclear but noted that he worked during normal 

business hours while operating a real estate brokerage, which it determined 

favored a monetary penalty. 

Regarding the fourth Kimmelman factor—whether the licensee's conduct 

caused an injury to the public—the Commission determined "the public is 

harmed when licensees fail to comply with Commission regulations. When a 

licensee is unable to conduct himself in accordance with the high standards 

expected of him and his profession, the public's confidence in the real estate 

industry is eroded." The Commission determined this factor weighed heavily in 

favor of a higher monetary penalty. 
36 A-3654-21

The fifth Kimmelman factor concerns the duration of the illegal activity. 

The Commission concluded Karpf's conduct lasted for well over a decade, which 

weighed in favor of a higher penalty. 

The sixth Kimmelman factor required the Commission to determine the 

existence of any criminal punishment and whether a civil penalty may be unduly 

punitive if other sanctions had been imposed. The lack of criminal punishment 

weighs in favor of a more significant civil penalty under Kimmelman. Id. at 

139. Because Karpf had not suffered any criminal penalties, the Commission 

determined this factor favored a higher monetary penalty.

The seventh, and last Kimmelman factor, required the Commission to 

consider the previous relevant regulatory and statutory violations of the licensee. 

It agreed that Karpf had held a broker's license since 1979 and had no history of 

any regulatory or statutory violations, and therefore considered this a mitigating 

factor in favor of Karpf. 

Based on this analysis, the Commission modified the recommendations of 

the ALJ and imposed a $5,000 monetary penalty. It appropriately considered 

the Kimmelman factors prior to imposing the monetary sanction. We discern no 

basis to disturb the finding as we cannot say the Commission's monetary 
37 A-3654-21

sanction, even though more stringent than the ALJ's recommendation, "shock[s] 

[our] sense of fairness." Herrmann, 192 N.J. at 28-29.

F. 

We now direct our attention to the Commission's imposition of a threeyear suspension. It noted that given the "seriousness of [Karpf's] actions," it 

modified the ALJ's recommendation of a two-year suspension to three years. 

The Commission based its decision on its findings Karpf failed to: properly 

supervise his office on a full-time basis; keep the office open to the public during 

regular business hours; and be physically present during usual business hours at 

least five days a week. This, coupled with the fact that this conduct occurred 

over a period of several years, demonstrated unworthiness, incompetence, and 

bad faith under N.J.S.A. 45:15-17(e). Lastly, the Commission expressed 

concern regarding Karpf's "disingenuous and self-serving arguments" which it 

determined demonstrated his lack of appreciation for the seriousness of his 

conduct. 

We are mindful of the deference we owe to the Commission with respect 

to the imposition of sanctions such as a suspension. However, we conclude it

failed to properly consider the countervailing issues that would potentially serve 

to mitigate the extent of such a suspension. For example, it is undisputed that 
38 A-3654-21

this matter was not prompted by a customer complaint, but rather an anonymous 

complaint. In fact, the Commission did not reference any history of customer 

or agent complaints regarding the operation of Karpf's real estate office during 

the forty years he operated his business. He had no past regulatory violations, 

and there were no allegations of any misappropriation of funds. There was also 

no specific injury to the public, and his conduct did not involve any criminal 

activity. 

Although we do not condone Karpf's actions, the record does demonstrate 

an otherwise unblemished record, which the Commission overlooked. 

Therefore, we direct the Commission to consider the mitigating evidence on 

remand in deciding an appropriate suspension. Although we recognize the 

Kimmelman factors are traditionally utilized to evaluate monetary fines, certain 

factors may, nevertheless, be considered by the Commission in determining 

whether to impose a suspension. For example, the Commission may consider 

the licensee's good or bad faith; the amount of profit earned from wrongful 

activity; the extent of any injury to the public; the duration of the wrongful 

activity; the existence of any criminal actions (which may, contrary to this 

factor's application under Kimmelman for the purposes of monetary damages, 

actually be viewed as a mitigating factor in the absence of criminal conduct for 
39 A-3654-21

the purposes of a suspension); the existence of any prior violations; and any 

other factors deemed relevant by the Commission in its sound discretion to 

impose an appropriate and fair sanction. 

To the extent we have not specifically addressed any of Karpf's remaining 

arguments, we conclude they lack sufficient merit to warrant discussion in a 

written opinion. R. 2:11-3(e)(1)(E). 

Affirmed in part, vacated in part, and remanded for further proceedings 

consistent with this opinion. We do not retain jurisdiction.